Stealing Intellectual Property…The Rush to Tariffs and Trade Wars!

The phrase ‘they are stealing our intellectual property’…has become a consistent political refrain, exploited by this administration as a singular rationale to arouse – drive executive and possibly future legislative action, i.e. impose tariffs on specific Chinese manufactured – assembled goods imported to the U.S.

This
particularly siloed tactic presumes…the Chinese government – communist
party leadership possess the ability to merely ‘flip a switch’ and suddenly
misappropriation and infringement of IP (intellectual properties) belonging –
issued to U.S. parties, i.e., businesses, individuals, institutions, and
organizations, etc., will stop. As is
often said, ‘that just ain’t gonna happen’!

Rooted in my experiences on this matter, it is wholly imprudent and signals poorly framed and short term thinking to… presume a culturally embedded and multi-generational ‘quick fix’ to trade imbalance directly correlates to theft of IP. That said, there is absolutely no doubt, it has been proven countless times, my research included, that misappropriation – infringement of U.S. issued IP is one of myriad challenges (risks) U.S. businesses encounter when engaging mainland Chinese markets.

But, to imply – infer through shrill, uninformed rhetoric…that U.S. business leadership are either unaware or wholly accepting of this phenomenon or its exclusivity to China, is, at minimum, wrongheaded and disingenuous.

Through my lens, any administration which chooses to…politically exploit this specific issue as a singled-minded path – remedy to mitigate the more impactful and economically troublesome trade imbalance between the U.S. and China, represents a misunderstanding of the risks of conducting business while holding IP and/or its licensure. Trying to mix apples and oranges in hopes of producing a grape, at some point in the future, is just not credible strategy or policy.

I prefer not to frame this issue as a direct correlate to mitigating a multi-generational trade imbalance…which began taking root in the late 1970’s (between the U.S. and China) through their strategic planning pronouncements, in 10, 15, and 25-year increments…

doing otherwise, in my judgment, is far too simplistic, and

assumes other countries, i.e., Brazil, Russia, India, or China, will think, act, and respond in accordance with concerns and preferences expressed,

and/or (general, specific) deterrent’s – sanctions threatened or imposed by a U.S. administration.

On the other hand, a foreign government’s reaction, and that of various entities which stand to benefit…the leadership of individual U.S. corporations,

could-may seek (negotiate) a favorable environment for their IP, but probably, that would be framed in a case-by-case basis.

While favorable trade – business relationships with one U.S. corporation may not extend to others…rational – experienced U.S. business professionals know, in a large percentage of internationally negotiated business arrangements, there is a felt sense shared by all parties that a collaborative outcome is prudent to pursue.

Let’s
be clear, I am not suggesting…that this persistent, troublesome, and
value laden risk to U.S. businesses warrants anything less than high level
administration attention to even hope there can – will be some level of amiable
mitigation or resolution.

With
20+ years of investigative research and study on this matter…beginning in the
early 1990’s, I can confidently report to readers there is no simple –
transactional fix that would wholly eliminate, or substantially mitigate this
specific ‘risk of doing business’, nor its cultural, institutional, and
economic (GDP) embedded underliers.

I,
my colleagues, and most U.S. business leaders whom I am familiar…would much prefer
the issue were addressed, strategies developed, and policy made rooted in
objective context and understanding absent ‘fire breathing retaliatory rhetoric’.
The latter of course, which quickly spiral beyond the ability of individual
business leaders to mediate on behalf of their company’s interests or
initiatives.

I have been consistently engaged in safeguarding
intellectual property and proprietary business information…along with other forms of (proprietary) business
intangible assets, i.e., intellectual, structural, and relationship capital, since
the early 1990’s. My investigative
research, study, and engagements, initially as an academic, and since 2006, as
an intangible asset strategist and risk specialist, I genuinely understand why
this administration and the multitudes of well versed, or something less than
well versed pundits, portray China as the embodiment of economic espionage. To be sure, China is a leading practitioner
of economic espionage, but its far from being the only place or origin.

Why
China…for starters, and let there be no doubt, this is where the largest trade
imbalance emanates. But also, the rhetoric has a lot to do with a
speakers’ felt presumption that flame throwing is a requisite to expediting
public and political support for a political initiative, i.e., a best practice.

In this instance, the target (country) is China…for which, again, there is more than ample
reason. Hence, publicly advocated – executive ordered sanctions and/or tariffs
on targeted goods represent two debatable presumptions, i.e., this is a
required path to (1.) achieving advantage, (2.) the target will
act-respond as rationally or irrationally as the flame thrower, and (3.) the
outcome will be strategic.

In my view, each represents an imperfect understanding
of diplomacy and negotiation…in todays ‘go fast, go hard, go global’ business commerce arena.
First, and perhaps most
important, if – when there may be favorable gains, they are highly likely to be
tactical, certainly not strategic. Second, flame throwing street
rhetoric, frequently sparks a bevy of in-kind (retaliatory) responses, in no
small part because few leaders, especially one in such a commanding lead as
China, want to appear appeasing to a term limited public flame thrower. Third,
responses will almost assuredly be framed in the target countries’ interest,
which, as conveyed above are pursued in 10, 15, and 25-year strategic
increments.

A
better-informed requisite to (politically) maximize…such felt presumptions which underlie current
business aggressivity should commence with
articulate…

tangible – quantifiable, albeit ‘best guesstimates’
of the range and types of losses experienced by U.S. businesses engaged in some
manner of foreign trade, i.e., the who, what, when, where, how, and why, and

the various ways misappropriation and
infringement of legally owned, issued, and/or licensed intellectual capital and
property adversely affect a U.S. business.

…I advocate there is a diplomatic obligation
to portray each of the above in an objective and understandable manner
specifying strategic and reasonably amiable outcomes which are desirable for
all parties that genuinely recognizes (country) economies, trade, and GDP’s are
no longer singular, rather globally intertwined, and that’s irreversible!

Yes,
China and numerous other countries…are indeed bad (trade) actors insofar as being
consistently positioned to misappropriate and apply any IP presumed to provide
competitive advantages while degrading others.

Let’s avoid assuming those engaged in theft of IP held by U.S. businesses only seek…the ingredients of say, pharmaceutical ‘wonder drugs’ or the ‘process’ for rendering military aircraft ‘stealthy’ or other potentially ‘game changing’ secrets…

to be sure, there are numerous other technologies developed with legitimate – good intentions, but which, can also be applied for illegitimate purposes when the inclinations to do so already exist and comprise a not insignificant percentage of a country’s GDP and employment.

On that note, its instructive to remind ourselves to…consider the ‘made in China’ label affixed to countless products – goods we routinely buy and use. After all, there are mutual economic benefits to China, India, Mexico, and Viet Nam, etc., as U.S. businesses seek lower (labor) cost locales for product manufacturing, assembly, and shipping.

That is not too even remotely suggest, U.S.
business are witting contributors…to challenges related to IP infringement, misappropriation, and
loss in the name of revenue and margins. There are and should be certain
expectations insofar as engaging in international trade, yesterday, today, and
tomorrow, which is respecting the rightful ownership of another’s expensive and
valuable intellectual properties and proprietary information ala intangible
assets.

after
all, it is an economic fact today that 80+% of most businesses value, revenue
generation, and competitive advantage lie in – emerge directly from intangible,
not tangible, assets.

Respectfully then, naively presuming these
circumstances – this environment can be easily or wholly reversed and overcome
to…

create the elusive and intangible ‘level playing field’,

absent an objective understanding of the cultural and policy drivers for how and why these challenges initially – historically emerged and persist,

is, at minimum, naïve as is any ‘flame throwing political rhetoric’ associated with such an important cause.

Either way, readers who wish to pursue paths
to…mitigate these business
risks and challenges are also obliged to recognize the asymmetric brands of economic espionage various ‘bad actor’
countries – corporations engage globally and at all stages of a business’s
development and trade transactions it may eventually engage.

The
global phenomena of economic espionage represent issues…which I have devoted many years of
investigative research, writing, publishing, and public speaking, including
trips to China and EU countries to better understand how, why, and when it occurs,
and equally important, apply the same questions to it being variously perceived,
perhaps subordinated, as merely ‘another risk of doing business’.